>
> > At the last one the company was intentionally managed
> > to fail. It was nothing more than a tax shelter for three
> > wealthy individuals, and as long as they didn't produce
> > anything they were happy. They would get a product
> > developed to where it was marketable, then screw the
> > customers, fire the entire technical staff, blame it all
> > on a "changing market", and then get more investor capital
> > to do it all over again. They did this at least three
> > times before the investment community caught to to what
> > they were doing.
>
>
> Chris, one of these days, we need to compare notes. I think
> I know who you are talking about. Our paths probably crossed
> at some point.
>
Another popular investor fraud scheme is to prop the company up by coming
up with a lucrative project, hiring all sorts of highly qualified people, and
then flooding the industry with press releases. Jerry Steiner of Fairchild
(NOT Fairchild Semiconductor) pulled this off when he decided he wanted to rid
himself of Fairchild Data in Scottsdale. They came up with a "Super Modem"
product development that was going to have all forms of digital modulation in a
single unit that would satisfy everyone. It was an effort to make the division
attractive to a buyer. One buyer, a telecommunications outfit in Singapore
stepped up to the plate and began negotiations. When it fell through everyone
associated with the project was fired or laid off and the division remained in
intensive care until what remained was sold off to Digital Microwave in San
Jose.
A similar outfit in Houston pulled a classic fraud scheme. The books
showed that they were manufacturing modems and selling them to customers all
over Mexico. That got the attention of California Microwave, who finally
purchased it lock, stock, and barrel for a tidy sum. Shortly afterwards they
felt that something was wrong as the sales soon dropped off precipitously. The
modems were all found in a warehouse in Mexico City gathering dust, and the
previous owners had mysteriously disappeared.
I have other first-hand accoounts, but I really don't want to recall them,
particularly the one where one investor lost $10M.
Beware of any company whose greatest product is press releases, such as
ParkerVision. One look at their first three or four patents will tell you
everything.
Chris
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